The Gap, Inc. reports its financial results for 52-week fiscal periods ending on a Saturday around the end of January each year. The following information (in US$ millions) was included in recent annual reports:

Instructions
(a) By what percentage did The Gap's total assets increase or decrease overall from 2008 to 2012? What was the change in each year?
(b) Comment on the changes in The Gap's liquidity over the five-year period. Which measure seems to give a better indication of its liquidity: working capital or the current ratio? Suggest a reason for the changes in The Gap's liquidity during the period.
(c) Do you believe that The Gap's creditors should be concerned about its liquidity?

Transcribed Image Text:

Jan. 28, . 29, n. 30, Jan. 3 Feb. 2, 2 20112010 400 $7,422 $7,065 $7,985 $7,564 $7,838 $2,181$1,83 $2,533 $1,847 $1,653 2.02:1.87: 2.19:1 .86: 1.68:1 0.89: 1 0.79:1 1.21:1 0.79:1 0.78:1 $1,885 $1,56 $2,348 $1,715 $1,724 $2,128 $2,095 $2,131 $2,158 $2,433 2010 5010009 2000 Total assets Working capital Current ratio Acid-test ratio Cash & cash equivalents Current liabilities